U.S. Sen. Reed blasts $66B profits on student loans

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PROVIDENCE, R.I. (AP) — U.S. Sen. Jack Reed on Saturday
called on Congress to do a better job of making student loans affordable
after a report showed the federal government earned an estimated $66
billion in profits from student loans originated between 2007 and 2012.
The
Rhode Island Democrat was reacting to a Government Accountability
Office report released Friday. A previous Congressional Budget Office
report estimated that the government will pocket an additional $185
billion in profits on new student loans made over the next 10 years.
"The
GAO report makes clear that Congress must do a better job of pricing
student loans closer to the actual cost to the government," Reed said in
a statement. "Students and parents who borrowed at needlessly high
rates should be given an opportunity to refinance at a lower rate.
"The
bigger question that the report does not address is that the student
loan programs were originally seen as an investment, not a profit center
or even a cost-neutral proposition," Reed said. "We invested in
offering low-cost loans to create opportunity, spur innovation, and grow
our economy."
Reed and eight other U.S. senators committed to
wring government profits out of student loans and address a $1.2
trillion in outstanding student loan debt they say is crushing families
and putting a strain on the economy.
An estimated 7 million student loan borrowers are currently in default.
"Today, student loan debt is becoming a drag on economic opportunity and growth. We must turn the
tide," Reed said.
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